Manchester’s buoyant residential market has helped to keep the city’s property industry afloat in recent months, while Liverpool has remained broadly resilient, but the latest Covid restrictions are worrying, said consultancy Avison Young.
The company’s UK Cities Recovery Index, which assesses nine UK cities’ prospects for economy recovery after the pandemic, found that Manchester recorded the second largest increase in number of residential sales listings between 1 March and 1 September, after London, “exceeding expectations”.
However, like other large UK cities, Manchester’s exposure to the office sector has held back economic recovery as offices have remained largely closed, impacting on city centre commercial activity.
In particular, city centre retail footfall has fallen well below the UK average after a spike at the end of July, with the index reading for Manchester sitting at 52.5 on 27 September against a national average of 74.6, according to Avison Young’s report.
The hotel and leisure sector has also taken a battering, with falling numbers of restaurant booking and cinema revenues recorded in recent months. The sector saw a steep rise during July and August due to the Eat Out to Help Out scheme, to an index reading of 107.7 on 31 August but this now stands at 93.1.
Chris Cheap, principal and managing director at Avison Young in Manchester, said: “Manchester’s vibrant cultural, leisure, creative, tech and educational mix contributes significantly to its economic performance, so as we navigate through the ongoing effects of Covid-19, it is critical that any recovery plan maintains the diverse ‘Manchester experience’ to sustain the broad sectoral spectrum of commercial real estate demand the city has traditionally seen.”
Cheap added: “People are central to Manchester’s pull, and it is vital that any new policy and recovery efforts reflect this through progressive planning via the public and private sector working together to build back better for the long term good of communities.”
Meanwhile, in Liverpool, the residential sector plateaued during the Covid lockdown, but has since risen and then remained steady with an index reading of 111.0 as of 27 September, suggesting that the sector has been “performing well since the end of February”, according to the report.
Multiple other industry sectors have remained largely resilient in recent months, with Avison Young’s general commercial activity sector index “robust” at 99.7, largely due to the Port of Liverpool remaining operational, the consultancy said.
However, levels of “mobility” in the city – including walking, driving and other transit modes – have dipped 6.5% since 21 September, the day before further lockdown restrictions came into effect, as has levels of hotel and leisure industry activity.
“The implementation of the recent increased restrictions for Merseyside has resulted in further decline, and this will plainly be exacerbated by the announcement of further restrictions on [1 October],” the report said.
Stephen Cowperthwaite, principal and managing director of Avison Young’s Liverpool office, said: “Liverpool offers so much in terms of its cultural, heritage and sporting offer, [as well as] retail, leisure, conferences and cruise liners.
“However, the effects of Covid-19 have had a significant impact on the tourism, hospitality and construction sectors that have been so important to Liverpool’s resurgent economy in recent years.
“We began to see signs of a cautious recovery over the summer, but with schemes such as Eat Out to Help Out now over, stricter local restrictions now in place and as we head into the winter months, it is a critical time to assess how the city responds.
“The time to act is now to ensure that we bounce back well and build a sustainable and inclusive economy.”
The index can be found here.